The Bottom Line? War Makes Stocks Go Up

Picking up where Neil Cavuto left off on Friday, "Bulls and Bears" on Satuarday (Dec. 10, 2005) also spent its time talking about Howard Dean's remarks instead of explaining why the stock market dropped last week.

Brenda Buttner began the segment with Dean's quote, noted in Melanie's post, and asked her panel of guests and regulars whether Democrats are "hurting America and the stock market?"

Well, of course, they are, responded the panel. "One, thank God Howard Dean is not commander in chief, and two, I think it's disgusting," said Gary B. Smith. "It paints us a spineless nation that can't finish the job. A spineless nation to terrorists is an object of attack or potential attack. You start getting attacked by terrorists, it weakens our financial markets, it weakens everything we live for. It's disgusting." He claimed Dean's comments hurt the dollar's strength. Certainly wouldn't want to blame any weakness of the dollar on our record balance of payments deficit, now would we?

Tobin Smith, from changewaveresearch.com, for once refrained from linking anything the Democrats did or said to a change in the stock market, saying the stock market's decline last week probably had more to do with the price of oil going up and some profit taking. But he said Dean's remarks gave Republicans "something to rally around."

Ken Dolan, author of Don't Mess with My Money and a guest panelist, gave the "rah, rah, let's win this one like we didn't in Vietnam" speech. "The military wins battle, Washington loses wars," he said.

In response to a prompt from Buttner, Scott Bleier, from hybridinvestors.com, tried to link the stock market runup to the invasion of Iraq. "Just think about where we were the week before we invaded Iraq. The Dow was at 7500 and the NASDAQ was at 1250. Look where we are," he said. I guess his implication was that war makes stocks go up so that's enough reason for him to fight them. "I think the market would be very unhappy if we left without the stated goal of a viable democratic government in Iraq," he said. Guess the market is destined to be unhappy, boys, because it looks like the Shites want an Islamic-based government, whether we want it or not.

The panel made clear it couldn't stand criticism of George Bush.

Guest Bob Froelich, from Scudder Investments, leaped to defend Bush, who wasn't mentioned in the Dean quote played by Buttner. "Think about it, this is an attack on the president, and when you attack the leader of the largest military, the largest economy, the largest consumer base, the largest stock market, yes, it's going to have an impact." Later, he said, "This isn't about debating the issue. This is about personal, vicious attacks. ... Once you're there and troops are in the field, that's not the time to have the debate." So, that means we have to stay forever because we can't ever discuss when to bring trooops home?

Pat Dorsey, of morningstar.com, filled his weekly role of trying to talk some sense into the other morons on the panel. "Wars cost money," he said. "They're pretty expensive and we have a lot of stuff here at home that we have not been able to find the money to pay for, and longer term, that's an issue," he said. He listed the $225 bilion spent on the war so far, the prescription drug benefit for Medicare, and Social Security's looming shortfall. "Things are fine now but you keep spending money. What we saw in the 70;s was a lot of money going for social programs and for the war at the same time. It's tough to spend on both at once," he said.

Even Dolan had to admit, "Forty-four million people do not have health insurance. There are food lines in Ohio. We need some of that dough that should be here. I'm not saying we should stop the war and pull out. All I'm saying is an awful lot of people are confused and wondering if we're spending our money right," he said.

A little later, the panel moved on to the ostensible purpose of the show -- discussing stocks. And here their true motives came out. Scott Bleier discussed Pentagon contractor General Dynamics. "Just before the Iraq War, it was a $50 stock. Now it's $122," he said.

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